Varo Bank in Draper, Utah, received a $50 million infusion from its parent earlier this year, only to lose half of that amount in the first quarter.
The $355 million bank lost $25.1 million, widening from $16.3 million a year earlier.
Noninterest expenses increased by 14% from a year earlier, to $59.4 million. While salaries and benefits remained the largest line item, other noninterest expenses, which include processing, technology, marketing, and third-party services, rose sharply to $36.6 million.
“The increase in expenses over the prior year reflects strategic investments in new marketing channels and targeted one-time costs to deliver operating efficiencies and other financial benefits,” the bank said in its call report.
Varo also had a $3.5 million loan-loss provision.
Another concerning trend: Deposits fell by 43% from a year earlier, to $215 million.